The answers to “What is a third-party logistics provider?” and “What is a transportation management system?” don’t fit so neatly in a box any more. The boxes and labels of yesterday are giving way to a single amorphous category: “Providers of Supply Chain Software and Services.”
I shared that perspective more than a year ago in Putting 3PLs and Software Vendors in a Box. “The reality is that manufacturers and retailers have a diversity of options today, and the right partner (regardless of what you label them) is the one that can provide the right mix of technology, services, and advice to help you achieve your desired outcomes.”
This reality was underscored for me at the recent CLX Logistics Annual Customer Conference, where I delivered a keynote presentation on “Important Skills and Attributes Tomorrow’s Transportation Leaders Must Have” (a topic for a future post). Mike Skinner, Senior Vice President and General Manager at CLX Logistics (a Talking Logistics sponsor), shared some statistics that illustrated the broad mix of technology, managed services, and consulting offerings its customers are using, including network optimization services, benchmarking and procurement services, intermodal and rail services, freight forwarding, and freight payment.
Simply put, it’s safe to say that no two customer engagements are the same at CLX Logistics — some customers use a broad mix of technology and service offerings, while others use a smaller, more targeted mix of solutions. And this diversity is by design. CLX Logistics promotes its Flexible Engagement Strategy as a differentiator: “Our Flexible Engagement Strategy allows us to build an offering to ideally fit your business goals, timelines and budget with a unique a la carte approach.”
This “a la carte” approach — with technology as the centerpiece in many cases — is a departure from how most third-party logistics providers (3PLs) have traditionally gone to market. As the lines continue to blur between what is a 3PL, a TMS vendor, and a consultant, more and more 3PLs will be forced to revisit their business models and go-to-market strategies.
CLX Logistics is not alone in providing clients with a mix of technology, managed services, and advice. Solution providers such as C.H. Robinson, enVista, LeanLogistics, and Transplace are also purusing this model. Some of them have their own internally-developed transportation management system, while others, like CLX Logistics, have strategic partnerships with software-as-a-service TMS vendors.
For more than a decade, CLX Logistics has been offering clients the IBM Sterling TMS solution (originally Nistevo), which was acquired last year by Kewill and is now called Kewill Transport. The acquisition effectively expands the solution footprint available to customers, especially in the areas of parcel shipping and global trade management. The integration is still in progress, but as CLX communicated at the conference, the broader technology footprint will open the door to new services and engagement opportunities down the road.
Speaking of new solutions, Mike Challman, Vice President of North American Operations at CLX Logistics, provided an overview of the company’s Capacity Exchange Initiative at the conference, which enables CLX customers with complementary transportation networks to collaborate with each other to maximize carrier capacity utilization and achieve cost savings.
Mike was my guest on Talking Logistics recently where he discussed this collaborative process in more detail. “It is a win-win-win for everybody,” said Mike. “The [service provider] wins because we’re bringing value to both [shippers and carriers]; shippers win because they’re getting capacity assurance and competitive rates; and the carriers win because they’re getting to see freight that maybe they didn’t [have visibility to before] and now they can improve loaded miles and get loads to destinations that are important to them.”
Collaborative shipping is not new or unique to CLX Logistics, but it’s clear from past attempts in the industry that making it work requires the right mix of technology, managed services, and advice. It’s also the formula for success for many other supply chain and logistics initiatives. The challenge, however, is that the right mix today will not be the right mix tomorrow. There is so much rapid change happening across all fronts of supply chain management that what shippers choose to outsource today, they might want to bring back in-house tomorrow, and vice versa.
So, what shippers want is not only the right mix of technology, managed services, and advice — they also want the ability to change that mix as their needs and objectives change, which is forcing solution providers to develop more flexible and configurable engagement models.
Note: C.H. Robinson, enVista, Kewill, LeanLogistics, and Transplace are Talking Logistics sponsors.
